We have been tracking the TSX-V (JX, CDNX) both nominally as below and in ratio to the senior Canadian TSX. The signals have been negative with the nominal ‘V’ in corrective consolidation for nearly year per this daily chart and in its ratio to TSX, which we use as a speculative inflation trade indicator. Here is the daily ‘V’ below the SMA 50 & 200 but above the first support level, which can be seen on the monthly chart below.
The monthly shows the ‘V’ perched atop a breakout point from the January 2018 high. This is important perspective for the more speculative ends of the inflation trades. As long as it holds above the 866 area it is still on its bigger picture rally despite a year of downward grind.
If it holds support and moves up again it would indicate that inflation-fueled speculation is alive and well. Even if the inflation is going to fail in 2022 as I think likely, let’s also bear in mind that it could include a final burst of intense speculation as the speculative cow pastures to the north finally get bid up in what is traditionally an ending signal to the inflation trades.
Bottom Line
Da ‘V’ ain’t dead yet.
